If you drive for Uber or Lyft and aren’t sure if you need Rideshare insurance in Michigan, read on. Let’s face it, accidents happen. Even the most careful drivers can be involved in an auto accident, but it’s often the last thing we expect when we hop into a rideshare like Uber or Lyft.
If you drive for a rideshare company and end up in an accident, the damages may not be covered by the company. It’s always a good idea to look at rideshare insurance, which can protect not only you – but your passengers as well. Just in case your personal auto insurance and standard rideshare company’s insurance don’t.
Formal rideshare insurance protection might be exactly what you need to ensure you are taking every precaution in the case of an accident. Rideshare insurance is a type of coverage that your local insurance agent will make available to you as a rideshare driver. This specific type of automobile insurance will fill the coverage gap provided by your personal car insurance and the commercial auto insurance (provided by the rideshare company). It’s quite easy to acquire as an add-on to your existing auto insurance policy.
Rideshare vehicle insurance is optional; however, it can cover some significant costs after an accident. These can include medical expenses from injuries to yourself, your passengers or a third party (such as a pedestrian or passengers in another vehicle. Other costs could also be covered such as vehicle or property damage.
Rideshare companies like Uber and Lyft do offer their drivers insurance, but it’s not going to cover every possible mishap. Here is a breakdown of how the provided rideshare insurance works, as it is divided into three ‘periods’:
At any time that you are driving your vehicle for personal use, your personal auto insurance will cover any incidents. This is referred to as your ‘offline’ status.
Waiting for Request:
The moment you turn on your driver availability, your status becomes ‘waiting for request’. This is the period of time when you are waiting for a passenger to request you nearby. The majority of rideshare companies offer up limited coverage during this period. Speaking on behalf of the two well-known companies, Uber and Lyft, maximum coverage is as follows:
$50,000 per person;
$100,000 per incident;
$25,000 for property damage.
The standard issued rideshare coverage will typically only cover your liability to a third party for bodily injury or property damage. If you do have an extended rideshare insurance, it will kick in to bridge the gap by the limited coverage offered by the rideshare company insurance.
Ride in Progress:
As soon as you accept a ride request, the rideshare coverage is no longer in effect. The commercial insurance provided by Uber or Lyft will cover any incidents during which your mobile app is recording the ride. A maximum coverage limit of $1 million per incident is imposed during this time period. The coverage while on your passenger’s drive is the most robust, and usually includes bodily injury, property and vehicle damage.
What are the Michigan rideshare insurance options?
In Michigan, you can customize the coverage to include comprehensive and collision coverage, uninsured motorist coverage and medical expense and personal injury protection. Although the rideshare’s corporate coverage protects the driver, if a passenger sues for personal injury, the driver would likely need their own added rideshare insurance coverage.
The best option for a rideshare driver is to consult a local automobile insurance agent. It’s advised that you should have a commercial auto insurance policy in addition to your personal auto insurance policy. This will provide physical damage coverage for the car and any liability or medical coverage for the passengers (regardless if you are ‘on the clock’ with Uber or Lyft, or just driving personally).
Since most rideshare drivers use a personal vehicle, they just leave their personal auto insurance policy in place. The potential problem is that if a rideshare passenger is in the vehicle, your insurance company could deny all claims. The reason for this is that you are driving in a commercial capacity with only personal insurance coverage. The safest bet is to make sure you have that ‘gap’ covered.
You should always notify your car insurance provider as soon as possible if you drive (or intend to work) for a rideshare company. Your personal car insurance carrier could terminate your coverage if they find out that you are driving for a commercial purposes without having notified them in advance.